The current foundation paper presents the contextual adaptation and emotion-influenced decision-making theory as a new framework to underpin decision-making under uncertainty. CAE-IDM embeds contextual factors, including environmental conditions, social influences, and temporal constraints within emotional states and cognitive strategies to account for limitations found within other theories: Rational Choice, Bounded Rationality, Prospect Theory, and Heuristics and Biases. It emphasizes a dynamic interaction of contexts and emotions that shape the quality and confidence in a decision. This provides a comprehensive model of adaptive cognitive strategies as a response to variation in contexts and emotional inputs. The paper discusses the theoretical underpinning, conceptual model, and practical applications of CAE-IDM; it therefore gives a strong basis for conducting further research on decision-making under uncertainty.